You can be young without money, but you can’t be old without it.
~ Tennessee Williams
We all have money stories but if your conversation about money is always about lack, it will have a negative impact on your financial health.
How often do you use any of these statements to describe your financial life?
I can’t afford it.
It’s too expensive.
I never have enough money.
My account is overdrawn.
My bills are always late.
If your everyday conversation is peppered with any of these or similar statements – then, it’s time to change your money story.
Watch your thoughts: They become your words.
Watch your words: They become your actions.
Watch your actions: They become your habits.
Watch your habits: They become your character.
Watch your character: It becomes your destiny.
I’m not a financial expert
Even though I’m not a financial expert, I was inspired to do this post because of my youngest son.
My son is a motivated, driven young man and has overcome many challenges in his young life. Even though he was a chronic asthmatic, he was determined to be on his high school basket ball team. Not only did he get picked for the team, he was consistently one of the starters.
At age 19 he walked into a major retail store for a job. He was hired and six months later he became the manager because of his overall performance. The company had a dramatic increase in sales.
He makes sound decisions, except when it comes to his money. My jaw fell to the floor when I observed his mismanagement of his money.
The habits you develop at an early age with money are the same habits you’ll have when you get older.
Don’t wait until you have X amount of dollars before you start thinking about your financial health. The time to focus on your financial health is the day you start earning money.
My relationship with money
My son’s attitude about money caused me to reflect on my own relationship with money and how I could have influenced his financial awareness negatively.
As the sole provider of my four children, I had a practical approach to managing my finances. But in retrospect, I can identify some areas where I could have improved my financial health, especially in the area of long term investments and credit card debt
Long term investments are an oversight for many women, especially single/divorced moms. Women are becoming savvier about money but we still have a long way to go.
Peter Miralles, an accomplished financial and investment advisor and planner, at Atlanta Wealth Consultants LLC, wrote on this topic in his article, Woman & Money – Moving From the Moment to the Future. Peter referenced a 2010 Prudential survey of 1,250 American women, 86% of those polled felt that they lacked knowledge when it came to choosing investment or insurance products, yet 95% of the respondents identified themselves as the financial decision-makers in their households.
Methinks I contributed to my son’s problem
Money confidence doesn’t happen by default. You have to use strategies to build a healthy financial foundation. I did some research so I could better guide my son. Here are four tips, from a non-financial expert, that will help you to change your money story. Continuing education is a must for your financial success.
Four practical tips to change your money story
1. Pay yourself first
I’ve been encouraging my son to do this. He doesn’t monitor his spending habits. He earns and spends his money without any awareness of where his money goes. That is why he’s meeting with a financial adviser. You’re never too young to develop a healthy relationship with money.
Pay yourself first, even if you have other financial obligations: rent, mortgage, car payments etc. It doesn’t matter if you earn a little or a lot, each month put a set amount into a savings/investment account.
You’ll need three basic accounts to do this:
Short Term Savings – Use this to save for a car, major appliances, vacations and the like. This will keep you from unnecessary credit card debt and excessive interest rates.
Emergency Fund – If you’re a Suze Orman fan, you know she believes that everyone on the planet should have an emergency fund. This money is for true emergencies: losing a job or other unforeseen problems. Add to this account until you have six to eight months of your monthly earnings.
Long Term Savings/Investments – this was my weak spot when I was raising my children. And now I’m playing catch up. This account is for your long term financial goals. I don’t like the term “retirement” but these are the investments that will make being older a lot more comfortable: mentally, physically, spiritually and emotionally.
If paying yourself first creates hardship for your essential needs: mortgage/rent, groceries etc., you’re living beyond your means and should take steps to reduce your monthly expenditures or increase your income.
2. Have a budget
Budgeting lies at the foundation of every financial plan, states Jeremy Vohwinkle, in his budgeting 101 article, on About.com. My son loves shoes and buys them on a whim. He spends money on impulse items. He overdraws his bank account. Recently I advised my son to have a budget for his monthly expenses and stick to it.
Here’s a handy workbook, How to Budget ,by Jackson James that gives you a step by step instructions to achieve your budgeting goals.
3. Use credit cards wisely
Some people get into a buying frenzy, forgetting they have to pay back the money plus interest.
12 years ago, my friend and her 18 year old son were very excited when he received his first credit card. Neither my friend nor her son had any knowledge on how to be responsible with credit cards. A few months later joy turned to despair.
Today, he’s still trying to pay off his credit debt and has not educated himself about credit cards and other financial matters. It was easy for him to buy, buy, and buy, with this plastic money.
My son doesn’t have a credit card. He applied for one a few days ago. That is why I gave him this booklet: how money works: secrets to financial success.
The booklet has a wealth of information. It will give my son a jump start in building his money confidence. The instructions are written for the average person to understand and put into effect.
Make a conscious decision to pay off your credit card balance each month. If you’re not able to do this, pay more than the minimum payment. And only use your credit card for real emergencies and your needs, not your wants and impulse items.
Occasionally, one may have a crisis where credit cards have to be used. But most credit card debts are not of this type.
4. Mindset and money
All your strategies, for your financial well being, will be in vain if you have limiting beliefs about money. I’ve seen limiting beliefs wreak havoc on the financial status of individuals from every socioeconomic background.
I share some tips that will help you to identify and release your limiting beliefs about money in this post Money Woes? Release Limiting Beliefs For Financial Abundance.
Here’s a video from Abraham Hicks on the topic of mindset and money.
It’s a wrap
I hope these tips inspire you to learn more about financial matters. They say that life gives you pebbles before they become rocks. Don’t ignore your financial pebbles; they’ll become a big financial rock.
Please share your money story
If you enjoyed reading this post, be sure to fill out this form to receive my blog post updates by e-mail, AND/OR leave a comment below and share this with your family, friends and Social Media. – Thank you!:-)
image by: Kromkrathog @ freedigitalphotos.net